Q1'11- Interim Report

2011INTERIM REPORT ON OPERATIONSOF THE DIASORIN GROUP

AT MARCH 31, 2011

DiaSorin S.p.A.Via Crescentino (no building No.) - 13040 Saluggia (VC) - Tax I.D. and Vercelli Company Register No. 13144290155

2

Board of Directors, Board of Statutory Auditors and Independent Auditors p. 3

The DiaSorin Group p. 5

Interim report on operations p. 8Review of the Group’s operating performance and financial position p. 9

Transactions with related parties p. 18

Significant events occurring after March 31, 2011 and business outlook p. 19

Consolidated financial statements of the DiaSorin Group at March 31, 2011 and March 31, 2010 p. 20

Notes to the consolidated quarterly report at March 31, 2011 and March 31, 2010 p. 25

Contents

3

Board of Directors, Board of Statutory Auditors and Independent Auditors

First Quarter Report 2011

Board of Directors (elected on April 27, 2010)

Chairman Gustavo Denegri

Deputy Chairman Antonio Boniolo

Chief Executive Officer Carlo Rosa (1)

Directors Giuseppe Alessandria (2) (3)

Chen Menachem EvenEnrico Mario AmoEzio Garibaldi (2)

Michele DenegriFranco Moscetti (2)

Gian Alberto Saporiti

Board of Statutory Auditors

Chairman Roberto Bracchetti

Statutory Auditors Bruno MarchinaAndrea Caretti

Alternates Umberto FaresMaria Carla Bottini

Committees

Internal Control Committee Ezio Garibaldi (Chairman)Franco MoscettiEnrico Mario Amo

Compensation Committee Giuseppe Alessandria (Chairman)Ezio GaribaldiMichele Denegri

Nominating Committee Franco Moscetti (Chairman)Giuseppe Alessandria Michele Denegri

Related-party Committee (4) Franco Moscetti (Coordinator)Giuseppe Alessandria Ezio Garibaldi

Independent Auditors Deloitte & Touche S.p.A.(1) General Manager(2) Independent Director(3) Lead Independent Director(4) Established pursuant to a Board resolution on November 5, 2010

4

Risultati economici First quarter First quarter (in thousands of euros) 2011 2010

Net revenues 111,403 86,676

Gross profit 79,836 62,036

EBITDA (1) 49,971 36,109

Operating result (EBIT) 43,464 31,522

Net profit for the period 28,483 19,518

Statement of financial position at 3/31/2011 at 12/31/2010(in thousands of euros)

Capital invested in non-current assets 199,461 204,642

Net invested capital 281,464 282,869

Net financial position 31,218 33,067

Shareholders’ equity (2) 312,682 315,936

Statement of cash flow First quarter First quarter (in thousands of euros) 2011 2010

Net cash flow for the period (4,442) 21,423

Free cash flow (3) 23,769 19,508

Capital expenditures 4,715 6,142

Dipendenti at 3/31/2011 at 12/31/2010

Number of employees 1,494 1,230

Consolidated financial highlights

(1) The Board of Directors defines EBITDA as the “operating result (EBIT)” before amortization of intangibles and depreciation of property, plant and equip-

ment.(2) Shareholders’ equity includes the Treasury stock reserve established in the first quarter of 2011 in the amount of 25,114 thousand euros. (3) Free cash flow is the cash flow from operating activities, counting utilizations for regular capital expenditures but before interest payments.

5


The DiaSorin Group is an international player in the market for in vitro diagnostics.

Specifically, the DiaSorin Group is active in the area of immunodiagnostics, a market segment that encompasses the cat-

egories of immunochemistry and infectious immunology.

In the immunodiagnostics market segment, the Group develops, produces, and markets immunoreagent kits for labora-

tory in vitro clinical diagnostics based on various technologies. The technologies that the Group uses and has established

as the foundation for the development and production of its entire product line reflect the technological path followed by

in vitro immunodiagnostic assaying, starting with the introduction of the first commercial tests at the end of the 1960s.

Specifically, there are three primary technologies:

• RIA (Radio Immuno Assay): This is a technology that uses radioactive markers and is currently employed primarily for

some products capable of providing results that cannot be delivered by other technologies. It does not enable the

development of products that can be used with automated testing systems and equipment, but only with products

for tests that have to be carried out manually by experienced technicians.

• ELISA (Enzyme Linked ImmunoSorbent Assay): Introduced in the 1980s, this is a non-radioactive technology in

which the signal generated by the marker is colorimetric, and which primarily makes it possible to develop products

in the microplate format. Originally, products that used the ELISA technology were developed in such a way that

diagnostic tests could be performed with the use of minimally sophisticated instrumentation and with a high level

of involvement by the laboratory staff. Later came the development of analyzers capable of automating some of the

manual operations, but they were still much more complex than the new generation of products that use the CLIA

technology.

• CLIA (ChemiLuminescent Immuno Assay): This is the latest generation technology that appeared in the early 1990s.

Here, the signal is generated by a marker marked with a luminescent molecule; the CLIA technology can be adapted

to products and instruments with features offering a high level of usage flexibility in terms of menus and the per-

formance speed of the test. This technology is used on the LIAISON system. Unlike ELISA, the CLIA technology has

made it possible to shorten processing time and has been used by diagnostic companies to develop products in pro-

prietary formats (that is, non-standard formats) based on cartridges capable of working only on the system devel-

oped by the particular company (so-called closed systems). The diagnostic kit used on the LIAISON system is manu-

factured by DiaSorin in cartridges, each of which contains 100 tests for the same disease. Unlike products that use

the ELISA technology, the operator is not required to perform any action on the product, which comes in its final

form and only needs to be loaded into the appropriate location on the equipment.

In addition to the development, production, and marketing of immunoreagent kits, the Group supplies its customers with

equipment that, when used in combination with the reagents, makes it possible to carry out the diagnostic investigation

automatically. Specifically, DiaSorin offers two primary types of equipment: the ETI-MAX system, for products that are

based on the ELISA technology, and the LIAISON system, which handles products developed on the basis of the CLIA tech-

nology.

DiaSorin’s products are distinguished by the high technological and innovative content brought to bear in the research and

development process and the large-scale production of the biological raw materials that constitute their basic active ingre-

dients (viral cultures, synthetic or recombinant proteins, monoclonal antibodies).

The DiaSorin Group

6

DiaSorin internally manages the primary processes involved in the research, production, and distribution aspects, that is,

the process that, starting with the development of new products, leads to the marketing of those products. The Group's

manufacturing organization consists of several facilities located in Saluggia (VC), at the Group’s Parent Company’s head-

quarters; Stillwater, Minnesota (USA), at the headquarters of DiaSorin Inc.; Dietzenbach, Frankfurt (Germany), at the head-

quarters of DiaSorin Deutschland GmbH; and Dublin (Ireland), at the headquarters of Biotrin Ltd. Two more plants, located

in Dartford (UK) and Kyalami (Johannesburg - South Africa), were added with the acquisition of the Murex business oper-

ations from the Abbott Group.

The Group headed by DiaSorin S.p.A. consists of 22 companies based in Europe, North, Central, and South America,

Africa and Asia. Five of these companies are involved in research and production.

Lastly, the Group established foreign branches that serve as commercial offices in Portugal and the Netherlands.

In Europe, the United States, Mexico, Brazil, China, Australia and Israel, the DiaSorin Group markets its products mainly

through its own sales organizations. In countries where the Group does not have a direct presence, it uses an international

network of more than 80 independent distributors.

7


DiaSorin S.p.A.

DiaSorinSouth Africa

(PY) LTD

DiaSorinSA

(France)

DiaSorin Ltd(UK)

DiaSorinCzech

DiaSorinAustriaGmbH

DiaSorinSA/NV

(Belgium)

DiaSorinLtd

(Israel)

DiaSorinAustralia(PTY) LTD

DiaSorinMexico

SA de CV

DiaSorinLtda

(Brazil)

DiaSorin SA/NVDutchBranch

DiaSorinAB

(Sweden)

BiotrinGroupLimited

DiaSorinLtd

(China)

DiaSorinDeutschland

GmbH

DiaSorinIberia

SA

DiaSorinInc

(USA)

UKASSE(Germany)

BiotrinHoldingsLimited

BiotrinIntellectualProperties

Limited

Diasorin S.p.A.UK Branch

DiaSorinIberia SA

Succursal enPortugal

BiotrinInternational

LimitedDiaSorinCanada

INC

100%

99.99%

99.99%

100%

100%

99.99%

100%

100%

100%

100%

99.99%

80%

100%

100%100%

100%

97.50%

100%

99.99%

100%

100%

Structure of the DiaSorin Group at March 31, 2011

8

Interim report on operations

Foreword

This interim report on operations at March 31, 2011 (hereinafter referred to as the “Quarterly Report”) was prepared in

accordance with international accounting principles (International Accounting Standards – IAS and International Financial

Reporting Standards – IFRS) and the corresponding interpretations (Standing Interpretations Committee – SIC and

International Financial Reporting Interpretations Committee – IFRIC) published by the International Accounting Standards

Boards (IASB). More specifically, it is being presented in condensed form, in accordance with the international accounting

principle that governs interim financial reporting (IAS 34), as adopted by the European Union, and complies with the

requirements of Article 154-ter, Sections 2 and 3, of Legislative Decree No. 58 of February 24, 1998.

When making comparisons with the first quarter of 2010, it is important to keep in mind that the data at March 31, 2011

reflect the consolidation of the Murex business operations, which were acquired and merged into the DiaSorin Group as

of June 1, 2010.

The foreign exchange market

During the first quarter of 2011, the exchange rate of the euro versus the U.S. dollar was slightly lower on average than

in the same period last year. Specifically, the average exchange rate for the first three months of 2011 was 1.368 U.S. dol-

lars for one euro, compared with 1.3829 U.S. dollars for one euro in the same period a year ago.

The euro lost value also vis-à-vis the other currencies used by the Group, with the exchange rate down considerably in

some cases, particularly for the Swedish kronor and the Brazilian real.

The euro showed significant decreases in value also with regard to the two currencies recently included in the analysis bas-

ket: in the first quarter of 2011, the Australian dollar and the South African rand appreciated by 11% and 7.7%, respec-

tively, compared with the same period the previous year.

The table below provides a comparison of the exchange rates for the first quarter of 2011 and 2010 (source: Italian

Foreign Exchange Bureau):

Average rates for Rates at

Currency First quarter First quarter 3/31/11 3/31/102011 2010

U.S. dollar 1.3680 1.3829 1.4207 1.3479

Brazilian real 2.2799 2.4917 2.3058 2.4043

British pound 0.8539 0.8876 0.8837 0.8898

Swedish kronor 8.8642 9.9464 8.9329 9.7135

Czech koruna 24.3749 25.8681 24.5430 25.4400

Canadian dollar 1.3484 1.4383 1.3785 1.3687

Mexican peso 16.5007 17.6555 16.9276 16.6573

Israeli shekel 4.9247 5.1638 4.9439 4.9916

Chinese yuan 9.0029 9.4417 9.3036 9.2006

Australian dollar 1.3614 1.5293 1.3736 1.4741

South African rand 9.5875 10.3852 9.6507 9.8922

9


Review of the Group’s operating performance and financial position

Operating performance in the first quarter of 2011

The positive trend of the previous quarters continued during the first three months of 2011, with the Group reporting

quarterly revenues of 111.4 million euros and significant improvements in the main profitability indicators.

The main operating and economic developments that characterized the first quarter of 2011 are reviewed below.

During the first three months of 2011, the DiaSorin Group increased revenues by 28.5 percentage points compared with

the same period in 2010 (26.9% at constant exchange rates). Net of the revenues from the Murex product line, the rev-

enue growth is 18.9% (17.3% at constant exchange rates).

One of the main factors driving the increase in revenues was a strong performance by CLIA technology products, driven

by a steady expansion of the base of installed LIAISON systems and rising sales of tests for Vitamin D and infectious dis-

ease, which grew by 26.7% compared with the previous year.

The gross profit totaled 79,836 thousand euros in the first quarter of 2011, compared with 62,036 thousand euros in the

same period last year, for a gain of 28.7 percentage points. Gross profit was equal to 71.7% of revenues, in line with the

level achieved in 2010.

The other profitability indicators also improved compared with the first three months of the previous year. EBITDA

increased from 36,109 thousand euros reported in 2010 to 49,971 thousand euros in the first quarter of the current year,

for a gain of 38.4%. EBIT grew by 37.9%, rising from 31,522 thousand euros in the first three months of 2010 to 43,464

thousand euros in the same period this year. The ratio of both indicators to revenues improved, respectively, from 41.7%

and 36.4% in the first quarter of 2010 to 44.9% and 39% in the first three months of 2011. However, it is worth men-

tioning that in the first quarter of 2010 the Group incurred non-recurring charges for legal and administrative expenses

related to the Murex acquisition. When the income statement data are restated without these charges, amounting to

1,006 thousand euros, the 2010 data used as a basis for comparison with the 2011 EBIT-to-revenue and EBITDA-to-rev-

enue ratios become 37.5% and 42.8%, respectively.

Lastly, the net profit for the quarter totaled 28,483 thousand euros, up 45.9% compared with the same period last year.

10

The table that follows shows the consolidated income statement for the quarters ended March 31, 2010 and March 31,

2011:

CONSOLIDATED INCOME STATEMENT

(in thousands of euros) 2011 2010as a % as a %

of revenues of revenues

Sales and service revenues 111,403 100.0% 86,676 100.0%

Cost of sales (31,567) -28.3% (24,640) -28.4%

Gross profit 79,836 71.7% 62,036 71.6%

Sales and marketing expenses (18,489) -16.6% (15,441) -17.8%

Research and development costs (5,216) -4.7% (4,042) -4.7%

General and administrative expenses (10,691) -9.6% (9,013) -10.4%

Total operating expenses (34,396) -30.9% (28,496) -32.9%

Other operating income (expense) (1,976) -1.8% (2,018) -2.3%

nonrecurring amount - (1,006) -1.2%

EBIT 43,464 39.0% 31,522 36.4%

Net financial income (expense) 1,682 1.5% (1,228) -1.4%

Profit before taxes 45,146 40.5% 30,294 35.0%

Income taxes (16,663) -15.0% (10,776) -12.4%

Net profit 28,483 25.6% 19,518 22.5%

Basic earnings per share 0.51 0.35

Diluted earnings per share 0.51 0.35

EBITDA (1) 49,971 44.9% 36,109 41.7%

(1) With regard to the income statement data provided above, please note that the Board of Directors defines EBITDA as the “result from operations” beforeamortization of intangibles and depreciation of property, plant and equipment. EBITDA, which the Company uses to monitor and assess the Group’s oper-ating performance, are not recognized as an accounting tool in the IFRSs and, consequently, should not be viewed as an alternative gauge to assess theGroup’s operating performance. Because the composition of EBITDA is not governed by the reference accounting principles, the computation criterionused by the Group could be different from the criterion used by other operators and/or groups and, consequently, may not be comparable.

Net revenues

The comments provided below with regard to net revenue refer exclusively to the DiaSorin business activities. As for the

Murex business activities, at March 31, 2011, the Group reported sales of Murex products valued at 8,303 thousand

euros. This amount was slightly less than anticipated and lower than in previous quarters, due mainly to the crisis in North

Africa.

With regard to the Murex product line, it is also worth mentioning that the transfer to DiaSorin has already been com-

pleted for most of the territories that were still handled through Abbott.

In the first quarter of 2011, net revenues generated exclusively through the sale of DiaSorin products and services totaled

103,100 thousand euros, or 16,424 thousand euros more than in the same period last year. The gain compared with the

first quarter of 2010 was equal to 18.9 percentage points.

With data stated at constant exchange rates (first quarter 2010), the year-over-year gain amounts to 15,030 thousand

euros (equal to 17.3%). The impact of changes in exchange rates reflects the loss of value of the euro versus all of the

other currencies used by the Group, particularly regarding the Brazilian real, the Swedish kronor and the U.S. dollar.

Breakdown of revenues by geographic region

The table below provides a breakdown of the consolidated revenues of the DiaSorin Group by geographic region of des-

tination. Because of the logistics flows that resulted from the need to use Abbott branches for distribution in some areas,

it is currently impossible to provide an accurate breakdown of the corresponding revenues by geographic region of desti-

nation. Therefore, it seems preferable to show the revenues from sales of Murex products separately from the geographic

breakdown of DiaSorin’s traditional business activities. Accordingly, sales and service revenue data by geographic region

are only those of DiaSorin’s business activities:

(in thousands of euros) First quarter

2011 2010 % change

Europe and Africa 49,029 43,038 13.9%

Central and South America 8,756 5,348 63.7%

Asia Pacific 9,609 6,440 49.2%

North America 35,706 31,850 12.1%

Total without Murex 103,100 86,676 18.9%

Murex 8,303 -

Grand total 111,403 86,676 28.5%

11


Europe and Africa

In the first quarter of 2011, the revenues generated in Europe and Africa totaled 49,029 thousand euros, for an increase

of 13.9% compared with the revenues booked in the same period last year (43,038 thousand euros). At constant

exchange rates, the sales growth in this region is 13.2%, benefitting to a limited extent from the loss of value of the euros

versus the Swedish kronor and the Israeli shekel.

The French and German subsidiaries were the best performers, increasing their revenues by 33% and 23.9%, respectively.

In Italy, sales grew by 7.6 percentage points.

North America

Revenues booked in in this region during the first three months of 2011 totaled 35,706 thousand euros, or 12.1% more

than in the same period last year. With data restated net of the currency effect, the increase is equal to 10.9 percentage

points.

At March 31, 2011, revenues booked in the North American market accounted for 34.6% of total Group revenues

(excluding sales of Murex products). This percentage was slightly lower than in 2010 (36.7%) due to the growing contri-

bution provided to total Group revenues by sales generated in Central and South America and Asia Pacific.

Central and South America

In the first three months of 2011, the Latin American sales region increased revenues by 3,408 thousand euros, or 63.7

percentage points. This improvement reflects in part the positive impact of an increase in the value of the Brazilian real

versus the euro. At constant exchange rate, revenues for this region increased by 53.1%.

To a significant extent, the growth reflects higher sales by the Brazilian subsidiary, which not only submitted the winning

offer in an important public call for tenders involving ELISA technology products, but also considerably increased revenues

from LIAISON technology products.

12

1st Quarter 2011 DiaSorin Businesses

North America 34.6%

Asia Pacific 9.3%

Central and South America 8.5%Europe and Africa 47.6%


North America 36.7%

Asia Pacific 7.4%

Central and South America 6.2%

Europe and Africa 49.7%

The Mexican subsidiary reported a revenues gain of 48.7 percentage points compared with the previous year (+39% at

constant exchange rates).

Cumulative sales to distributors in this region increased by 31.8% compared with 2010.

Asia Pacific

In the first quarter of 2011, the revenues booked in the Asian markets totaled 9,609 thousand euros, for a gain of 49.2

percentage points compared with the first three months of 2010. As was the case in other regions, this increase reflects

the positive impact of favorable fluctuations in exchange rates. With data at constant exchange rates, the region’s growth

rate is equal to 47.5 percentage points.

Net of the Murex business, sales in the Chinese market increased by 46.4 percentage points compared with the previous

year, thanks to the expansion of the installed base of LIAISON systems and the resulting gain in revenues generated by

CLIA technology products.

Lastly, sales generated by the network of third-party distributors, when viewed net of the revenues booked in Australia,

where direct distribution began in July 2010, show an increase of 35.3%.

Breakdown of revenues by technology

The table that follows shows the percentage of the Group’s consolidated revenues contributed by each technology in the

first quarter of 2011 and 2010. In order to maintain comparability with the previous year, the data in the breakdown of

revenues by technology do not include sales of Murex products, which are based exclusively on ELISA technology. Had the

revenues from these products been included in the breakdown by technology, the percentage of annual revenues con-

tributed by ELISA products would have been 19.7%.

% of revenues contributed

First quarter 2011 First quarter 2010

RIA 4.7% 6.2%

ELISA 13.2% 16.4%

CLIA 72.4% 67.9%

Equipment sales and other revenues 9.7% 9.5%

Total 100% 100%

13


In the first quarter of 2011, the revenues generated by LIAISON products increased by 26.7 percentage points compared

with the same period last year.

14

ELISA 13.2%

CLIA 72.4%Equipment sales and other revenues9.7%

RIA 4.7%


ELISA 16.4%

CLIA 67.9%Equipment salesand other revenues9.5%

RIA 6.2%


Revenues from CLIA products accounted for 72.4% of total revenues at the end of the first quarter of 2011. At March

31, 2011, about 3,774 automated LIAISON analyzers were installed at facilities operated by direct and indirect customers

of the Group, for an increase of 133 units compared with the installed base at December 31, 2010. It must be mentioned

that, during the first quarter, a significant portion of system deliveries scheduled for March was postponed to the follow-

ing quarter.

Operating performance

The Group ended the first quarter of 2011 with a gross profit of 79,836 thousand euros, for a gain of 28.7 percentage points

compared with the 62,036 thousand euros reported at March 31, 2010. The ratio of gross profit to revenues was equal to

71.7 percentage points.

Operating expenses increased to 34,396 thousand euros in the first three months of 2011, up 20.7 percentage points com-

pared with the same period last year. While operating expenses grew in absolute terms, their impact as a percentage of total

revenues decreased from 32.9 percentage points in the first quarter of 2010 to 30.9 percentage points in the same period

this year.

In the first quarter of 2011, the ratio of research and development costs to revenues held relatively steady, with investments

equal to 4.7% of revenues.

The ratio of general and administrative expenses to revenues decreased in the first three months of 2011, falling from 10.4

percentage points in 2010 to 9.6 percentage points in 2011.

As a result of the reduced impact of expenses and other operating charges on revenues, consolidated first quarter EBIT grew

to 43,464 thousand euros, up 37.9 percentage points compared with 2010, for a ratio of EBIT to revenues of 39%.

When the 2010 data are restated to eliminate the impact of the nonrecurring charges incurred for the acquisition of the

Murex business operations, the 2011 EBIT show an increase of 33.6% compared with the same period the previous year.

In addition, depreciation of property, plant and equipment and amortization of intangibles increased compared with the pre-

vious year due to the launch of the LIAISON XL system and the inclusion of the Murex assets, which were not present in the

Company’s financial statements at March 31, 2010.

Due to the combined impact of these factors, EBITDA for the first quarter of 2011 grew to 49,971 thousand euros, for a gain

of 38.4 percentage points compared with the same period in 2010, causing the ratio of EBITDA to revenues to improve from

41.7 percentage points to 44.9 percentage points in 2011. When the 2010 EBITDA are restated to eliminate the impact of

the nonrecurring charges incurred for the Murex transaction, EBITDA show an increase of 34.6 percentage points and the

EBITDA-to-revenues ratio improves from 42.8 percentage points in 2010 and 44.9 percentage points in 2011.

Financial income and expense

Net financial income amounted to 1,682 thousand euros in the first quarter of 2011, as against net financial expense of

1,228 thousand euros in the same period the previous year. The difference between the two quarters is due mainly to the

measurement at fair value of U.S. dollar forward sales contracts, amounting to 812 thousand euros.

Interest and other financial expense includes 100 thousand euros in interest on borrowings (279 thousand euros in the

first quarter of 2010) and 264 thousand euros in fees on factoring transactions (162 thousand euros in the first quarter

of 2010).

Result before taxes and net result

The first quarter of 2011 ended with a result before taxes of 45,146 thousand euros, which generated a tax liability of

16,663 thousand euros. In the same period last year, the result before taxes and the corresponding tax liability amounted

to 30,294 thousand euros and 10,776 thousand euros, respectively.

The tax rate for the quarter was 36.9% (35.6% in the first quarter of 2010).

Consequently, the consolidated net profit totaled 28,483 thousand euros, up from 19,518 thousand euros in the same

period last year, for a gain of 45.9%.

In the first quarter of 2011, earnings per share grew to 0.51 euros, compared with 0.35 euros in 2010.

15


Analysis of consolidated cash flow

A schedule showing a condensed consolidated statement of cash flows, followed by a review of the main statement items

and the changes that occurred compared with the corresponding period in 20101, is provided below:

STATEMENT OF CASH FLOWS

(in thousands of euros) First quarter 2011 First quarter 2010

Cash and cash equivalents at beginning of period 62,392 47,885

Net cash from operating activities 27,635 25,163

Cash used for financing activities (27,852) 2,111

Cash used for investing activities (4,225) (5,851)

Net change in cash and cash equivalents (4,442) 21,423

Cash and cash equivalents at end of period 57,950 69,308

The cash flow from operating activities increased from 25,163 thousand euros in the first quarter of 2010 to 27,635 thou-

sand euros in the same period in 2011. This gain reflects mainly an improvement in the income stream (net result plus

depreciation and amortization, additions to provisions and other non-cash items) during the period, as working capital

grew at a faster rate than in the previous year. The following developments are worthy of mention:

• The increase in trade receivables compared with December 31, 2010, reflecting the Group’s revenue growth and a

deterioration of payment trends in Italy;

• The cash outflows to extinguish other short-term liabilities, i.e., payment of the second installment of the amount

owed to Immuno for the purchase of its business operations in Australia (2,497 thousand euros) and a portion of

the remaining debt towards Abbott for the acquisition of the Murex business operations (about 700 thousand

euros);

• Tax payments totaling 6,683 thousand euros, mainly representing income taxes owed by the U.S. and south African

subsidiaries and the income tax withheld on dividends received by DiaSorin S.p.A.

The liquid assets used in investing activities totaled 4,225 thousand euros, down from 5,851 thousand euros in the first

quarter of 2010.

In the first quarter of 2011, the Group invested 3,274 thousand euros in medical equipment, little changed compared

with the 3,307 thousand euros invested in the same period in 2010.

Cash was also used for purchases of treasury shares, which required outlays amounting to 25,114 thousand euros.

Available liquid assets decreased by 4,442 thousand euros in the first quarter of 2011, as against an increase of 21,423

thousand euros in the same period in 2010.

At March 31, 2011, available liquid assets held by the Group totaled 57,950 thousand euros, down from 62,392 thou-

sand euros at the end of 2010.

16

Statement of financial position of the Group at March 31, 2011

At March 31, 2011, total assets amounted to 447,025 thousand euros, substantially the same as at the beginning of the

year.

In the first quarter of 2011, non-current assets decreased from 204,642 thousand euros to 199,461 thousand euros, due

to the period’s depreciation of property, plant and equipment and amortization of intangibles and to the translation effect

resulting from the appreciation of the euro versus the main currencies used by the Group.

A breakdown of net working capital is provided below:

(in thousands of euros) 3/31/11 12/31/10 Change

Trade receivables 112,836 106,411 6,425

Ending inventory 69,272 68,311 961

Trade payables (36,920) (40,515) 3,595

Other current assets/liabilities (1) (35,747) (27,781) (7,966)

Net working capital 109,441 106,426 3,015

(1) Other current assets/liabilities is defined as the algebraic sum of receivables and payables other than financial and trade related items.

Working capital grew by 3,015 thousand euros in 2011, due mainly to a rise in trade receivables, offset in part by a change

in other current assets/liabilities that reflected primarily an increase in the tax liability.

At March 31, 2011, the net financial position was positive by 31,218 thousand euros. A breakdown is provided below:

At March 31, 2011 At March 31, 2010

Cash and cash equivalents (57,950) (62,392)

Liquid assets (a) (57,950) (62,392)

Other current financial assets (b) (1,108) (296)

Current bank debt 7,908 8,289

Other current financial liabilities 444 533

Current indebtedness (c) 8,352 8,822

Net current financial position (d)=(a)+(b)+(c) (50,706) (53,866)

Non-current bank debt 19,320 20,539

Other non-current financial liabilities 168 260

Non-current indebtedness (e) 19,488 20,799

Net financial position (f)=(d)+(e) (31,218) (33,067)

Other information

At March 31, 2011, the Group had 1,494 employees (1,451 at December 31, 2010).

17


In the normal course of business, DiaSorin S.p.A. engages on a regular basis in commercial and financial transactions with

its subsidiaries, which are also Group companies. These transactions, which are part of the Group’s regular operations and

are executed on standard market terms, consist of the supply of goods and services, including administrative, information

technology, personnel management, technical support and consulting services, which produce receivables and payables

at the end of the year, and financing and cash management transactions, which produce income and expenses.

These transactions are eliminated in the consolidation process and, consequently, are not discussed in this section of this

Report.

The Group awards additional benefits to several eligible employees of DiaSorin S.p.A. and other Group companies

through a stock option plan. The costs incurred in connection with this plan totaled 257 thousand euros in the first three

months of 2001 (179 thousand euros in 2010).

The compensation payable to senior managers and eligible employees (key management) is consistent with standard mar-

ket terms for compensation offered to employees with a similar status.

Employees are also awarded incentive payments tied to the achievement of corporate or personal targets and bonuses

predicated on the achievement of a predetermined length of service.

18

Transactions with related parties

Subsequent to the end of the quarter, the Group announced that it entered into an agreement with Precision System

Science Co. Ltd, a Japanese company, to develop an analyzer for the molecular diagnostic tests that its Irish subsidiary

Biotrin International Ltd is developing in the clinical area of infectious diseases using the LAMP (Loop Mediated Isothermal

Amplification) technology.

In addition, DiaSorin recently announced that it signed a five-year agreement with Laboratory Corporation of America

Holdings (LabCorp®), a U.S. company, for the supply of the new LIAISON XL analyzer, together with an FDA-approved

Vitamin D level determination test (Liaison 25 OH Vitamin D) and a series of tests in the clinical area of infectious diseases.

Insofar as the expected performance of the DiaSorin Group in 2011 is concerned, current projections call for revenues to

reach an amount ranging between 465 million euros and 475 million euros, for an overall growth rate of more than 15%,

and the installed base to expand by more than 600 units during the course of the year.

An increase in operating results proportionately larger than the growth in revenues should enable the Group to report

EBITDA in the neighborhood of 200 million euros.

Saluggia, May 13, 2011

The Board of Directors

by: Carlo Rosa

Chief Executive Officer

19


Significant events occurring after March 31, 2011 and business outlook

20

CONSOLIDATED INCOME STATEMENT

(in thousands of euros) Notes First quarter

2011 2010

Net revenues (1) 111,403 86,676

Cost of sales (2) (31,567) (24,640)

Gross profit 79,836 62,036

Sales and marketing expenses (3) (18,489) (15,441)

Research and development costs (4) (5,216) (4,042)

General and administrative expenses (5) (10,691) (9,013)

Other operating income (expenses) (6) (1,976) (2,018)

nonrecurring amount - (1,006)

EBIT 43,464 31,522

Net financial income (expense) (7) 1,682 (1,228)

Result before taxes 45,146 30,294

Income taxes (8) (16,663) (10,776)

Net result for the period 28,483 19,518

Broken down as follows:

Minority interest in net result - -

Group Parent Company’s interest in net result 28,483 19,518

Earnings per share (basic) (9) 0.51 0.35

Earnings per share (diluted) (9) 0.51 0.35

Consolidated financial statements of the DiaSorin Groupat March 31, 2011 and March 31, 2010

21


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in thousands of euros) Notes 3/31/11 12/31/10

ASSETS

Non-current assets

Property, plant and equipment (10) 55,453 57,551

Goodwill (11) 64,228 65,402

Other intangibles (11) 59,596 61,462

Investments in associates 27 27

Deferred-tax assets (12) 19,534 19,656

Other non-current assets 623 544

Total non-current assets 199,461 204,642

Current assets

Inventories (13) 69,272 68,311

Trade receivables (14) 112,836 106,411

Other financial assets (17) 1,108 296

Other current assets (15) 6,398 5,575

Cash and cash equivalents 57,950 62,392

Total current assets 247,564 242,985

TOTAL ASSETS 447,025 447,627

22

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (follows)

(in thousands of euros) Notes 3/31/11 12/31/10

LIABILITIES AND SHAREHOLDERS’ EQUITY

Shareholders’ equity

Share capital (16) 55,698 55,693

Additional paid-in capital (16) 13,744 13,684

Statutory reserve (16) 4,519 4,519

Other reserves (16) (23,726) 8,076

Retained earnings (Accumulated deficit) (16) 233,964 143,546

Net result for the period (16) 28,483 90,418

Total shareholders’ equity 312,682 315,936

Non-current liabilities

Long-term borrowings (17) 19,488 20,799

Provisions for employee severance indemnitiesand other employee benefits (18) 20,841 20,692

Deferred-tax liabilities (12) 2,648 2,328

Other non-current liabilities (19) 3,949 5,179

Total non-current liabilities 46,926 48,998

Current liabilities

Trade payables (20) 36,920 40,515

Other current liabilities (21) 21,547 23,544

Income taxes payable (22) 20,598 9,812

Current portion of long-term debt (17) 8,352 8,822

Total current liabilities 87,417 82,693

Total liabilities 134,343 131,691

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 447,025 447,627

23


CONSOLIDATED STATEMENT OF CASH FLOWS


2011 2010

Cash flow from operating activities


Adjustments for:

- Income taxes 16,663 10,776

- Depreciation and amortization 6,507 4,587

- Financial expense (1,682) 1,228

- Additions to/(Utilizations of) provisions for risks 659 799

- (Gains)/Losses on sales of non-current assets 51 (1)

- Additions to/(Reversals of) provisions for employee severance indemnities- and other employee benefits 76 82

- Changes in shareholders’ equity reserves:

- Stock option reserve 257 179

- Cumulative translation adjustment from operating activities 554 188

- Change in other non-current assets/liabilities (2,273) (1,368)

Cash flow from operating activities before changes in working capital 49,295 35,988

(Increase)/Decrease in receivables included in working capital (9,244) (10,594)

(Increase)/Decrease in inventories (1,643) (1,521)

Increase/(Decrease) in trade payables (1,596) 3,937

(Increase)/ Decrease in other working capital items (2,135) 780

Cash from operating activities 34,677 28,590

Income taxes paid (6,683) (3,231)

Interest paid (359) (196)

Net cash from operating activities 27,635 25,163

Investments in intangibles (211) (1,438)

Investments in property, plant and equipment (4,504) (4,704)

Retirements of property, plant and equipment 490 291

Cash used in regular investing activities (4,225) (5,851)

Loan repayments (300) (184)

(Repayment of)/Proceeds from other financial obligations (181) (354)

Share capital increase/Dividend distribution 65 -

(Purchases)/Sales of treasury shares (25,114) -

Foreign exchange translation differences (2,322) 2,649

Cash used in financing activities (27,852) 2,111

Net change in cash and cash equivalents (4,442) 21,423

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 62,392 47,885

CASH AND CASH EQUIVALENTS AT END OF PERIOD 57,950 69,308

24

OTHER COMPONENTS OF THE COMPREHENSIVE INCOME STATEMENT


2011 2010


Currency translation differences (7,671) 7,536

Net investment hedge gains (losses) after tax effect 726 (1,465)

Other components of comprehensive income - -

Total other components of comprehensive income for the period (6,945) 6,071

Total net comprehensive income for the period 21,538 25,589

Including:

- Group Parent Company’s interest 21,538 25,589

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

(in thousands of euros) Share Additional Statu- Cumula- Stock Treasury Retained Net Groupcapital paid-in tory tive option stock earnings profit interest in

capital reserve transla- reserve reserve (Accum- (loss) share-tion lated for the holders’

reserve deficit) period equity

Shareholders’ equity at 12/31/2009 55,000 5,925 2,427 (1,927) 1,472 - 84,911 70,047 217,855

Appropriation of previous year’s profit - - - - - - 70,047 (70,047) -

Dividend distribution - - - - - - - - -

Share-based paymentsand other entries - - - - 179 - - - 179

Translation adjustment - - - 7,536 - - - - 7,536

Change in scope of consolidation - - - - - - 75 - 75

Net investment hedge gains/(losses) after tax effect - - - (1,465) - - - - (1,465)

Net result for the period - - - - - - - 19,518 19,518

Shareholders’ equity at 3/31/2010 55,000 5,925 2,427 4,144 1,651 - 155,033 19,518 243,698

Shareholders’ equity at 12/31/2010 55,693 13,684 4,519 7,192 884 - 143,546 90,418 315,936

Appropriation of previous year’s profit - - - - - - 90,418 (90,418) -

Dividend distribution - - - - - - - - -

Share-based paymentsand other entries 5 60 - - 257 - - - 322

Translation adjustment - - - (7,671) - - - - (7,671)

Change in scope of consolidation - - - - - - - - -

Purchases and sales of treasury shares - - - - - (25,114) - - (25,114)

Net investment hedge gains/(losses) after tax effect - - - 726 - - - - 726

Net result for the period - - - - - - - 28,483 28,483

Shareholders’ equity at 3/31/2011 55,698 13,744 4,519 247 1,141 (25,114) 233,964 28,483 312,682

25


GENERAL INFORMATION AND SCOPE OF CONSOLIDATION

General information

The DiaSorin Group specializes in the development, manufacture and distribution of products in the immunochemistry

and infectious immunology product groups. These product classes can also be grouped into a single family called immun-

odiagnostics.

DiaSorin S.p.A., the Group’s Parent Company, has its headquarters on Via Crescentino (no building number), in Saluggia

(VC).

Principles for the preparation of the interim report on operations

This quarterly report was prepared in compliance with the International Financial Reporting Standards (“IFRSs”), as issued

by the International Accounting Standards Board (“IASB”) and adopted by the European Union. The designation IFRSs also

includes the International Accounting Standards (“IASs”) that are still in effect and all of the interpretations of the

International Financial Reporting Interpretations Committee (“IFRIC”).

This quarterly report was prepared in accordance with the requirements of the relevant international accounting standard

(IAS 34 – Interim Financial Reporting).

These notes provide information in summary form, in order to avoid duplicating information published previously, as

required by IAS 34. Specifically, these notes discuss only those components of the income statement and balance sheet

the composition or change in amount of which require comment (due to the amount involved or the type of transaction

or because an unusual transaction is involved) in order to understand the Group’s operating performance, financial per-

formance and financial position.

When preparing interim financial reports, management is required to develop estimates and assumptions that affect the

amounts shown for revenues, expenses, assets and liabilities in the financial statements and the disclosures provided with

regard to contingent assets and liabilities on the date of the interim financial statements. If such estimates and assump-

tions, which were based on management’s best projections, should differ from actual events, they will be modified appro-

priately when the relevant events produce the abovementioned differences.

As a rule, certain valuation processes, particularly the more complex processes such as determining whether the value of

non-current assets has been impaired, are carried out fully only in connection with the preparation of the annual financial

statements, when all the necessary information is available, except when there are impairment indicators that require an

immediate evaluation of any impairment losses that may have occurred.

The Group engages in activities that, taken as a whole, are not subject to significant seasonal or cyclical shifts in revenue

generation during the year.

The income tax liability is recognized using the best estimate of the weighted average tax rate projected for the entire year.

In this consolidated quarterly report, all amounts are in thousands of euros unless otherwise stated.

Notes to the consolidated quarterly report at March 31, 2011 and March 31, 2010

26

The accounting principles applied to prepare this consolidated semiannual report are consistent with those used for the

annual consolidated financial statements at December 31, 2010, since it has been determined that the revisions and inter-

pretations published by the IASB that were applicable as of January 1, 2011 did not require any material changes in the

accounting principles adopted by the Group the previous year.

This quarterly report was not audited.

Financial statement presentation formats

The financial statements are presented in accordance with the following formats:

• In the income statement, costs are broken down by function. This income statement format, also known as a “cost

of sales” income statement, is more representative of the Group’s business than a presentation with expenses broken

down by nature because it is consistent with internal reporting and business management methods and is consistent

with international practice in the diagnostic industry.

• In the balance sheet, current and non-current assets and current and non-current liabilities are shown separately.

• The cash flow statement is presented in accordance with the indirect method.

Scope of consolidation

This consolidated quarterly report includes the financial statements of DiaSorin S.p.A., the Group’s Parent Company, and

those of its subsidiaries.

Subsidiaries are companies over which the Group is able to exercise control, i.e., it has the power to govern their operat-

ing and financial powers so as to obtain benefits from the results of their operations.

Subsidiaries are consolidated line by line from the date the Group obtains control until the moment when control ceases

to exist. Dormant subsidiaries and subsidiaries that generate an insignificant volume of business are not consolidated.

Their impact on the Group’s total assets and liabilities, financial position and bottom-line result is not material.

A list of the subsidiaries included in the scope of consolidation, complete with information about head office locations and

the percentage interest held by the Group, is provided in Annex I.

27

Other information

Information about significant events occurring after March 31, 2011, the Group’s business outlook and its transactions

with related parties is provided in separate sections of this quarterly report.

The table below shows the exchange rates used to translate amounts reported by companies that operate outside the

euro zone:

Currency Average rates for Rates at

First quarter First quarter 3/31/11 12/31/102011 2010

U.S. dollar 1.3680 1.3829 1.4207 1.3362

Brazilian real 2.2799 2.4917 2.3058 2.2177

British pound 0.8539 0.8876 0.8837 0.8608

Swedish kronor 8.8642 9.9464 8.9329 8.9655

Czech koruna 24.3749 25.8681 24.5430 25.061

Canadian dollar 1.3484 1.4383 1.3785 1.3322

Mexican peso 16.5007 17.6555 16.9276 16.5475

Israeli shekel 4.9247 5.1638 4.9439 4.7378

Chinese yuan 9.0029 9.4417 9.3036 8.822

Australian dollar 1.3614 1.5293 1.3736 1.3136

South African rand 9.5875 10.3852 9.6507 8.8625

28

As required by IFRS 8, the Company designated the geographic regions where it operates as its operating segments.

The Group’s organization and internal management structure and its reporting system identify the following segments:

Italy and UK Branch, Europe (Germany, France, Belgium and the Netherlands, Spain and Portugal, Ireland, Austria, Great

Britain, Scandinavia, Czech Republic), North America (United States and Canada) and Rest of the World (Brazil, Mexico,

Israel, China Australia and South Africa).

The Group has adopted a commercial organization structured by geographic regions, which was developed to address the

requirements created by geographic expansion and strategic initiatives, such as the launch of the LIAISON XL. This new

organization, which was conceived to reflect the destinations of the Group’s sales, is based on the following four regions:

Europe and Africa, North America, Latin America, and Asia Pacific (including China).

As a result, the financial data of the DiaSorin Group that are being communicated to the financial markets and the invest-

ing public now include revenue information that reflects the regional organization mentioned above.

The schedules that follow show the Group’s operating and financial data broken down by geographic region. Information

about revenues based on customer locations is provided in the comments to the schedule showing a breakdown of net

revenues by geographic region.

No unallocated common costs are shown in the abovementioned schedules because the operations in each country

(hence, each segment) are equipped with comprehensive independent organizations (sales, technical support and

accounting) fully capable of exercising their functions. Moreover, the Italy segment invoices each quarter to the other seg-

ments the costs that are incurred centrally (mainly insurance costs and costs related to the Group’s IT systems and man-

agement personnel).

Eliminations refer mainly to inter-segment margins that are eliminated upon consolidation. Specifically, the elimination of

the margin earned by the Italy segment on the sale of equipment to other segments is shown both at the result level and

with regard to capital expenditures. The margins earned on products sold by manufacturing facilities to sales branches

that have not yet been sold to customers are eliminated only at the result level.

Segment assets include all items related to operations (non-current assets, receivables and inventories), but do not include

tax related items (deferred-tax assets) and financial assets, which are shown at the Group level.

The same approach was used for segment liabilities, which include items related to operations (mainly trade payables and

amounts owed to employees), but do not include financial and tax liabilities and shareholders’ equity items, which are

shown at the Group level.

Operating segments

29


ITA

LYEU

ROPE

NO

RTH

AM

ERIC

ARE

STO

FTH

EW

ORL

DEL

IMIN

ATIO

NS

CON

SOLI

DATE

D

(inth

ousa

ndso

feur

os)

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

INCO

ME

STAT

EMEN

T

Reve

nues

from

outs

ider

s25

,402

21,4

4030

,160

24,7

7936

,310

33,1

1319

,619

7,34

4(8

8)-

111,

403

86,6

76

Inte

r-seg

men

trev

enue

s21

,484

17,8

035,

291

4,49

87,

513

4,31

91,

385

45(3

5,67

3)(2

6,66

5)-

-

Tota

lrev

enue

s46

,886

39,2

4335

,451

29,2

7743

,823

37,4

3221

,004

7,38

9(3

5,76

1)(2

6,66

5)11

1,40

386

,676

Segm

ent

resu

lt6,

273

4,16

47,

627

4,70

226

,640

23,0

223,

657

570

(733

)(9

36)

43,4

6431

,522

Unal

loca

ted

com

mon

cost

s-

--

--

--

--

--

-

EBIT

--

--

--

--

--

43,4

6431

,522

Othe

rinc

ome

(exp

ense

),ne

t-

--

--

--

--

--

-

Fina

ncia

linc

ome

(exp

ense

)-

--

--

--

--

-1,

682

(1,2

28)

Resu

ltbe

fore

taxe

s-

--

--

--

--

-45

,146

30,2

94

Inco

me

taxe

s-

--

--

--

--

-(1

6,66

3)(1

0,77

6)

Net

resu

lt-

--

--

--

--

-28

,483

19,5

18

OTH

ERIN

FORM

ATIO

N

Inve

st.i

npr

op.,

plan

tand

equi

p.12

559

83

609

1297

7113

4-

-21

11,

438

Inve

stm

ents

inin

tang

ible

s1,

513

1,93

61,

503

1,69

51,

137

1,19

192

339

5(5

72)

(513

)4,

504

4,70

4

Tota

linv

estm

ents

1,63

82,

534

1,50

62,

304

1,14

91,

288

994

529

(572

)(5

13)

4,71

56,

142

Amor

tizat

ion

(872

)(3

88)

(531

)(5

18)

(67)

(68)

(287

)(6

5)-

-(1

,757

)(1

,039

)

Depr

ecia

tion

(2,1

55)

(1,4

88)

(1,3

46)

(1,2

38)

(863

)(5

65)

(853

)(6

07)

467

350

(4,7

50)

(3,5

48)

Tot.

amor

tiz.a

ndde

prec

.(3

,027

)(1

,876

)(1

,877

)(1

,756

)(9

30)

(633

)(1

,140

)(6

72)

467

350

(6,5

07)

(4,5

87)

ITA

LYEU

ROPE

NO

RTH

AM

ERIC

ARE

STO

FTH

EW

ORL

DEL

IMIN

ATIO

NS

CON

SOLI

DATE

D

(inth

ousa

ndso

feur

os)

3-31

-11

12-3

1-10

3-31

-11

12-3

1-10

3-31

-11

12-3

1-10

3-31

-11

12-3

1-10

3-31

-11

12-3

1-10

3-31

-11

12-3

1-10

STAT

EMEN

TO

FFI

NAN

.PO

SITI

ON

Segm

enta

sset

s20

2,89

818

3,15

799

,570

95,6

9868

,063

70,9

2157

,516

54,6

88(5

9,64

1)(3

9,20

8)36

8,40

636

5,25

6

Unal

loca

ted

asse

ts-

--

--

--

--

-78

,619

82,3

71

Tota

lass

ets

202,

898

183,

157

99,5

7095

,698

68,0

6370

,921

57,5

1654

,688

(59,

641)

(39,

208)

447,

025

447,

627

Segm

entl

iabi

litie

s53

,650

39,0

8736

,259

37,1

3911

,611

13,5

8225

,460

26,1

31(4

3,72

3)(2

6,00

9)83

,257

89,9

30

Unal

loca

ted

liabi

litie

s-

--

--

--

--

-51

,086

41,7

61

Shar

ehol

ders

’equ

ity-

--

--

--

--

-31

2,68

231

5,93

6

Tota

llia

bil.

and

shar

eh.e

quity

53,6

5039

,087

36,2

5937

,139

11,6

1113

,582

25,4

6026

,131

(43,

723)

(26,

009)

447,

025

447,

627

EURO

PEA

ND

AFR

ICA

NO

RTH

AM

ERIC

ACE

NT.

AN

DSO

UTH

AM

E.A

SIA

PACI

FIC

MU

REX

CON

SOLI

DATE

D

(inth

ousa

ndso

feur

os)

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

INCO

ME

STAT

EMEN

TS

Reve

nues

from

outs

ider

s49

,029

43,0

3835

,706

31,8

508,

756

5,34

89,

609

6,44

08,

303

-11

1,40

386

,676

Consolidated income statement

The notes to the consolidated income statement are provided below. More detailed information about the components

of the income statement is provided in the Report on Operations.

1. Net revenues

In the first three months of 2011, net revenues, which are generated mainly through the sale of diagnostic kits, totaled

111,403 thousand euros, or 28.5% more than in the first three months of 2010. Revenues for the first quarter of 2011

include equipment rentals and technical support revenues of 1,832 thousand euros, compared with 1,051 thousand euros

in the same period last year.

As for the Murex business activities, at March 31, 2011, the Group reported sales of Murex products valued at 8,303 thou-

sand euros.

2. Cost of sales

In the first quarter of 2011, the cost of sales amounted to 31,567 thousand euros, compared with 24,640 thousand euros

in the first three months of 2010. The cost of sales includes 3,483 thousand euros paid for royalties (2,588 thousand euros

in the same period in 2010) and 1,672 thousand euros in costs incurred to distribute products to end customers (1,173

thousand euros in the first quarter of 2010). Cost of sales also includes the depreciation of medical equipment held by

customers, which amounted to 2,925 thousand euros (2,425 thousand euros in the same period last year).

3. Sales and marketing expenses

Sales and marketing expenses increased to 18,489 thousand euros in the first quarter of 2011, up from 15,441 thousand

euros in the first three months of 2010. This item consists mainly of marketing costs incurred to promote and distribute

DiaSorin products, costs attributable to the direct and indirect sales force and the cost of the technical support offered

together with the Group-owned equipment provided to customers under gratuitous loan contracts.

4. Research and development costs

The research and development costs incurred in the first quarter of 2011, which totaled 5,216 thousand euros (4,042

thousand euros in the same period in 2010), include all non-capitalized research and development outlays amounting to

3,264 thousand euros (2,737 thousand euros in the same period in 2010), costs incurred to register the products offered

for sale and meet quality requirements of 1,557 thousand euros (1,155 thousand euros in the first quarter of 2010), and

the amortization of capitalized development costs totaling 395 thousand euros, which, starting with the first quarter of

2011, includes the amortization of Liaison XL costs, (150 thousand euros in the first quarter of 2010).

During the first quarter of 2011, the Group capitalized new development costs amounting to 125 thousand euros, com-

pared with 619 thousand euros in the first quarter of 2010.

30

Description and main changes

31


5. General and administrative expenses

General and administrative expenses include expenses incurred for corporate management activities; Group administra-

tion, finance and control; information technology; corporate organization; and insurance. These expenses totaled 10,691

thousand euros in the first quarter of 2011, compared with 9,013 thousand euros in the same period in 2010.

6. Other operating income (expenses)

Net other operating expenses totaled 1,976 thousand euros in the first quarter of 2011 (net expenses of 2,018 thousand

euros in the first three months of 2010, including charges of 1,006 thousand euros incurred for the acquisition of the

Murex product line). This item includes other income from operations that does not derive from the Group’s regular sales

activities (such as gains on asset sales, government grants and insurance settlements), net of other operating expenses

that cannot be allocated to specific functional areas (losses on asset sales, out-of-period charges, indirect taxes and fees,

and additions to provisions for risks).

More specifically, this item includes additions to the previsions for risks and charges of 942 thousand euros and additions

to the allowance for doubtful accounts of 369 thousand euros.

7. Net financial income (expense)

The table below provides a breakdown of financial income and expense:

First quarter 2011 First quarter 2010

Interest and other financial expense (527) (567)

Valuation of financial instruments as per IAS 39 812 -

Interest on pension funds (190) (195)

Interest and other financial income 89 112

Net translation adjustment 1,498 (578)

Net financial income (expense) 1,682 (1,228)

In the first quarter of 2011, the Group reported net financial income of 1,682 thousand euros, as against net financial

expense of 1,228 thousand euros in the same period the previous year.

The difference between the two quarters is due mainly to the measurement at fair value of U.S. dollar forward sales con-

tracts executed by the Group’s Parent Company to hedge expected cash flows from the U.S. subsidiary (income of 812

thousand euros).

Interest and other financial expense includes 264 thousand euros in fees on factoring transactions (162 thousand euros in

the first quarter of 2010), 190 thousand euros in interest on pension funds (195 thousand euros in the same period in

2010) and 100 thousand euros in interest on bank borrowings (279 thousand euros in the same period in 2010).

The income statement for the first quarter of 2011 reflects income of 812 thousand euros from the measurement at fair

value of U.S. dollar forward sales contracts.

The net effect of currency translation differences was positive by 1,498 thousand euros in the first quarter of 2011 and

negative by 578 thousand euros in the same period last year.

8. Income taxes

The income tax expense recognized in the income statement for the first quarter of 2011 amounted to 16,663 thousand

euros (10,776 thousand euros in the same period in 2010). The tax expense amount includes non-deductible foreign taxes

withheld on the dividends paid to the Group’s Parent Company by the U.S. subsidiary, which amounted to 677 thousand

euros in the first quarter of 2011. In the first three months of 2011, the tax burden was equal to 36.9% of the profit

before taxes (35.6% in the first quarter of 2010).

9. Earnings per share

Basic earnings per share, which are computed by dividing the net result attributable to shareholders by the average num-

ber of shares outstanding, amounted to 0.35 euros in the first quarter of 2010, compared with 0.51 euros in the same

period in 2011.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

10. Property, plant and equipment

The table below shows the changes that occurred in this account as of March 31, 2011:

(in thousands of euros) Net carrying Addi- Deprecia- Retire- Transla- Reclassi- Net carryingvalue at tions tion ments tion fications value at

12/31/10 adjustment and other 3/31/11changes

Land 2,320 - - - (14) - 2,306

Buildings 6,054 11 191 - (165) - 5,709

Plant and machinery 6,707 120 349 - (122) (19) 6,337

Manufacturing and distribution equipment 34,127 3,679 3,966 387 (809) 641 33,285

Other assets 5,410 249 244 24 (127) 2 5,266

Construction in progress and advances 2,933 445 - 130 (40) (658) 2,550

Total property, plant and equipment 57,551 4,504 4,750 541 (1,277) (34) 55,453

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11. Intangible assets

A breakdown of the changes in intangible assets at March 31, 2011 is as follows:

(in thousands of euros) Net carrying Additions Amortiza- Translation Reclassi- Net carryingvalue at tion adjustment fications and value at

12/31/10 other changes 3/31/11

Goodwill 65,402 - - (1,174) - 64,228

Development costs 12,798 125 395 (80) (1) 12,447

Concessions, licenses and trademarks 34,837 24 759 (223) 36 33,915

Industrial patents and intellectual property rights 13,611 47 582 (50) - 13,026

Advances and other intangibles 216 15 21 (1) (1) 208

Total intangible assets 126,864 211 1,757 (1,528) 34 123,824

12. Deferred-tax assets and deferred-tax liabilities

Deferred-tax assets amounted to 19,534 thousand euros. They relate to consolidated companies that have deferred-tax

assets in excess of deferred-tax liabilities and to consolidation adjustments. Deferred-tax liabilities, which totaled 2,648

thousand euros, relate to consolidated companies that have deferred-tax liabilities in excess of deferred-tax assets. They

are shown on the liabilities side of the statement of financial position.

The balance reflects the net deferred-tax assets computed on the consolidation adjustments (mainly from the elimination

of unrealized gains on intra-Group transactions) and on temporary differences between the amounts used to prepare the

consolidated financial statements and the corresponding amounts used by the consolidated companies for tax purposes.

Deferred-tax assets were recognized in the financial statements when their future use was deemed to be probable. The

same approach was used to recognize the benefit provided by the use of tax loss carryforwards, most of which, under cur-

rent laws, can be brought forward indefinitely.

Based on the multi-year plans prepared by the Group’s management, the Group is expected to generate sufficient taxable

income in future years to allow for the full recovery of the abovementioned amount.

An analysis of deferred-tax assets, net of offsettable deferred-tax liabilities, is provided below:

(in thousands of euros) 3/31/2011 12/31/2010

Deferred-tax assets 19,534 19,656

Deferred-tax liabilities (2,648) (2,328)

Total net deferred-tax assets 16,886 17,328

The Group offsets deferred-tax assets and liabilities when they refer to the same company. Depending on whether they

are positive or negative, the resulting balances are recognized as deferred-tax assets or deferred-tax liabilities, respectively.

13. Inventories

A breakdown of inventories at March 31, 2011 and a comparison with the data at December 31, 2010 is provided below:


Gross Provisions Net Gross Provisions Net amount for write- amount amount for write- amount

downs downs

Raw materials and supplies 21,898 (1,786) 20,112 22,389 (1,958) 20,431

Work in progress 28,272 (2,834) 25,438 28,410 (3,332) 25,078

Finished goods 24,492 (770) 23,722 23,683 (881) 22,802

Total 74,662 (5,390) 69,272 74,482 (6,171) 68,311

The table below shows the changes that occurred in the provisions for inventory writedowns:


Opening balance 6,171 3,871

Additions for the period 209 2,318

Utilizations/Reversals for the period (855) (159)

Translation differences and other changes (134) 141

Ending balance 5,390 6,171

14. Trade receivables

Trade receivables amounted to 112,836 thousand euros at March 31, 2011. The table that follows shows the changes

that occurred in the allowance for doubtful accounts, which totaled 7,202 thousand euros at March 31, 2011.



Additions for the period 369 833

Utilizations and reversals for the period (94) (30)

Currency translation differences and other changes (138) 333

Closing balance 7,202 7,065

15. Other current assets

Other current assets of 6,398 thousand euros (5,575 thousand euros at December 31, 2010) consist mainly of accrued

income and prepaid expenses for insurance, interest, rentals and government grants; tax credits for foreign taxes withheld;

and advances paid to suppliers.

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16. Shareholders’ equity

Share capital

At March 31, 2011, the fully paid-in share capital consisted of 55,698 million common shares, par value of 1 euro each.

The increase of 5 thousand euros in the first quarter of 2011 reflects the implementation of a capital increase reserved for

the 2007-2012 Stock Option Plan.

Additional paid-in capital

This account, which had a balance of 13,744 thousand euros at March 31, 2011, increased by 60 thousand euros com-

pared with December 31, 2010, due to the exercise of the first tranche of options awarded under the 2007-2012 Stock

Option Plan.

Statutory reserve

This reserve amounted to 4,519 thousand euros, unchanged compared with December 31, 2010.

Other reserves

A breakdown of other reserves is as follows:


Currency translation reserve 247 7,192

Treasury stock reserve (25,114) -

Stock option reserve 1,141 884

Total other reserves (23,726) 8,076

The currency translation reserve showed a decrease of 6,945 thousand euros at March 31, 2011, due to the impact of

changes in the exchange rates for the U.S. dollar and the Brazilian real.

This reserve reflects differences generated by the translation at end-of-period exchange rates of the shareholders’ equities

of consolidated companies whose financial statements are denominated in foreign currencies. The net difference, which

was negative by 7,671 thousand euros, includes a charge of 1,170 thousand euros for the adjustment made to the good-

will allocated to cash generating units (CGUs) that operate with currencies other than the euro.

The reserve also includes unrealized translation differences on indebtedness in foreign currencies borrowed by the Group’s

Parent Company to hedge its equity investment in the DiaSorin USA subsidiary, positive by 972 thousand euros after tax

effect, and the difference on the translation into euros of the balances of the English branch, negative by 246 thousand euros.

The balance in the stock option reserve refers to the 2007-2012 Stock Option Plan and the new 2011-2013 Plan.

The change in this reserve reflects the recognition of stock option costs amounting to 257 thousand euros.

The treasury stock reserve, amounting to 25,114 thousand euros, was established in the first quarter of 2011.

The implementation of the program to purchase treasury shares for use in connection with the Company’s new stock

option plan began on January 17, 2011, in accordance with the terms and conditions authorized by the Shareholders’

Meeting of April 27, 2010. The program was completed on February 15, 2011, resulting in the purchase of 750,000 com-

mon shares, equal to 1.35% of the Company’s share capital.

The shares were purchased at unit prices that were never lower by more than 15% or higher by more than 15% com-

pared with the closing price of the DiaSorin common shares for the stock market trading session preceding each purchase.

17. Borrowings

Borrowings include 19,488 thousand euros in long-term debt and 8,352 thousand euros for the current portion due

within one year.

The table that follows lists the borrowings outstanding at March 31, 2011 and provides a comparison with the data at

December 31, 2010 (amounts in thousands of euros):

Lender institution Currency Short-term Long-term Amount due Totalamount amount after 5 years

Interbanca USD USD 8,534 21,352 - 29,886

Amount in EUR 6,007 15,029 - 21,036

Interbanca EUR EUR 1,380 3,448 - 4,828

IMI – Ministry of Educ., University and Research EUR 185 843 93 1,028

Unicredit for flood relief EUR 336 - - 336

Finance leases EUR 444 168 - 612

Total 8,352 19,488 93 27,840

The following amounts were repaid in the first quarter of 2011: 106 thousand euro to IMI, 194 thousand euros to

Unicredit and 181 thousand euros to leasing companies.

The table below lists the facilities outstanding at March 31, 2011 and the changes that occurred during the quarter

(amounts in thousands of euros):

Lender institution Balance New Repay- Currency Fair value Amortized Balance at 12/31/10 borrowings ments translation measure- cost effect at 3/31/11

during the during differences mentperiod the period

GE Capital (formerly Interbanca) USD 22,365 - - (1,340) 11 21,036

GE Capital (formerly Interbanca) EUR 4,828 - - - - 4,828

IMI – Ministry of Educ., University and Research 1,122 - (106) - 12 1,028

Unicredit for flood relief 513 - (194) - 17 336

Finance leases 793 - (181) - - 612

Total borrowings owed to financialinstitutions 29,621 - (481) (1,340) - 40 27,840

Financial instruments (296) (812) - (1,108)

Total financial liabilities 29,325 - (481) (1,340) (812) 40 26,732

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There were no changes in contract terms compared with December 31, 2010 and DiaSorin was in compliance with all of

the operating and financial covenants of the existing loan agreements.

A breakdown of the Group’s net financial position at March 31, 2011 is as follows:

At March At December 31, 2011 31, 2010

Cash and cash equivalents (57,950) (62,392)

Liquid assets (a) (57,950) (62,392)

Other current financial assets (b) (1,108) (296)

Current bank debt 7,908 8,289

Other current financial liabilities 444 533

Current indebtedness (c) 8,352 8,822

Net current indebtedness (d)=(a)+(b)+(c) (50,706) (53,866)

Non-current bank debt 19,320 20,539

Other non-current financial liabilities 168 260

Non-current indebtedness (e) 19,488 20,799

Net financial position (f)=(d)+(e) (31,218) (33,067)

A breakdown of the changes in the Group’s available liquid assets is provided in the statement of cash flows.

18. Provision for employee severance indemnities and other employee benefits

The balance in this account reflects all of the Group’s pension plan obligations, other post-employment benefits and ben-

efits payable to employees when certain requirements are met. Group companies provide post-employment benefits to

their employees by contributing to external funds and by funding defined-contribution and/or defined-benefit plans.

The manner in which these benefits are provided varies depending on the applicable statutory, tax-related and economic

conditions in the countries where Group companies operate. As a rule, benefits are based on each employee’s level of

compensation and years of service. The Group’s obligations refer to the employees currently on its payroll.

Defined-contribution plans

Certain Group companies pay contributions to private funds or insurance companies pursuant to a statutory or contrac-

tual obligation or on a voluntary basis. With the payment of these contributions, the companies in question absolve all of

their obligations. The liability for contributions payable is included under Other current liabilities. The cost attributable to

each year, which accrues based on the services provided by employees, is recognized as a labor cost of the relevant orga-

nizational unit.

Defined-benefit plans

The Group’s pension plans that qualify as defined-benefit plans include the provisions for employee severance indemnities

in Italy, the Alecta system in Sweden and the U-Kasse pension plan and Direct Covenant system in Germany.

The liability owed under these plans is recognized at its actuarial value using the projected unit credit method. Any result-

ing actuarial gains or losses are recognized in accordance with the Corridor Method.

Other employee benefits

The Group provides its employees with additional long-term benefits, which are paid when employees reach a predeter-

mined length of service. In these cases, the value of the liability recognized in the financial statements reflects the proba-

bility that these benefits will be paid and the length of time for which they will be paid. The liability owed under this plan

is recognized at its actuarial value using the projected unit credit method. In this case, the Corridor Method is not applied

to any resulting actuarial gains or losses.

The table that follows summarizes the Group’s main employee benefit plans that are currently in effect:

(in thousands of euros) Balance at 3/31/11 Balance at 12/31/10 Change during the period

Employee benefits

provided in:

- Italy 5,678 5,667 11

- Germany 12,534 12,420 114

- Sweden 2,093 2,077 16

- Other 536 528 8

20,841 20,692 149

broken down as follows:

- Defined-benefit plans

Provision for employee severance indemnities 4,863 4,842 21

Other defined-benefit plans 14,627 14,497 130

19,490 19,339 151

- Other long-term benefits 1,351 1,353 (2)

Total employee benefits 20,841 20,692 149

38

The table below shows a breakdown of the main changes that occurred in the first quarter of 2011:

(in thousands of euros) Defined-benefit Other benefits Total employee plans benefits

Balance at December 31, 2010 19,339 1,353 20,692

Financial expense/(income) 190 - 190

Actuarial losses/(gains) - (10) (10)

Service costs 77 9 86

Contribution/Benefits paid (124) - (124)

Currency translation differences and other changes 8 (1) 7

Balance at March 31, 2011 19,490 1,351 20,841

19. Other non-current liabilities

Other non-current liabilities totaled 3,949 thousand euros at March 31, 2011.

They reflect provisions for risks and charges amounting to 3,949 thousand euros. The table that follows shows the

changes that occurred in this account:



Additions for the period 942 1,735

Utilizations (126) (1,158)

Reversals for the period (18) (223)

Currency translation differences and other changes (52) 153

Ending balance 3,949 3,203

20. Trade payables

Trade payables, which totaled 36,920 thousand euros at March 31, 2011, represent amounts owed to suppliers for pur-

chases of goods and services. There are no amounts due after one year.

21. Other current liabilities

Other current liabilities of 21,547 thousand euros consist mainly of amounts owed to employees for bonuses (11,928

thousand euros) and contributions payable to social security and health benefit institutions (2,388 thousand euros). The

balance at March 31, 2011 also includes 1,889 thousand euros representing the 2012 installment of the price payable for

the assets acquired by DiaSorin Australia.

39


22. Income taxes payable

The balance of 20,598 thousand euros represents the income tax liability for the profit earned in the first three months of

2011, less estimated payments made, and for other indirect taxes and fees.

23. Commitments and contingent liabilities

Significant commitments and contractual obligations

DiaSorin S.p.A., the Group’s Parent Company, and Stratec executed a series of agreements in connection with the devel-

opment and production of a new, fully automated, chemiluminescence diagnostic system (called LIAISON XL). There are

three main agreements: a development contract, a supply contract and a settlement agreement.

The supply contract signed by DiaSorin and Stratec calls for the latter to manufacture and supply exclusively to DiaSorin

the LIAISON XL analyzer. The contract has a term of 10 years, starting on the date an invoice is issued for the first LIAISON

XL system and is renewable each year.

The Group has agreed to purchase a minimum number of analyzers. The projected annual commitment is deemed to be

significantly lower than the normal level of capital investment that would be required for current or future equipment pro-

duction. As a result, net invested capital is not expected to undergo significant structural changes in the future as a result

of this commitment.

Contingent liabilities

The DiaSorin Group operates globally. As a result, it is exposed to the risks that arise from the complex laws and regula-

tions that apply to its commercial and manufacturing activities.

The Group believes that, overall, the amounts set aside, for pending legal disputes, in the corresponding provision for risks

are adequate.

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Company Head office Currency Share Par value per % interest Number of location capital share or held directly shares or

partnership partnership interest interests held

DiaSorin Benelux S.A/N.V. Brussels (Belgium) EUR 1,674,000 6,696 99.99% 249

DiaSorin Ltda São Paulo (Brazil) BRR 10,011,893 1 99.99% 10,011,892

DiaSorin S.A. Antony (France) EUR 960,000 15 99.99% 62,494

DiaSorin Iberia S.A. Madrid (Spain) EUR 1,453,687 6 99.99% 241,877

DiaSorin Ltd Oldbury GBP 500 1 100.00% 500(Great Britain)

DiaSorin Inc. Stillwater (USA) USD 1 0.01 100.00% 100

DiaSorin Canada Inc Mississauga (Canada) CAD 200,000 N/A 100.00% 100 Class ACommon shares

DiaSorin Mexico S.A de C.V. Mexico City MXP 63,768,473 1 99.99% 99,999(Mexico)

DiaSorin Deutschland GmbH Dietzenbach EUR 275,000 275,000 100.00% 1(Germany)

DiaSorin AB Sundyberg (Sweden) SEK 5,000,000 100 100.00% 50,000

DiaSorin Ltd Rosh Haayin (Israel) ILS 100 1 100.00% 100

DiaSorin Austria GmbH Vienna (Austria) EUR 35,000 35,000 100.00% 1

DiaSorin Czech S.ro. Prague CZK 200,000 200,000 100.00% 1(Czech Republic)

Biotrin Group Limited Dublin (Ireland) EUR 3,923 0.01 100.00% 392,182

Biotrin International Limited Dublin (Ireland) EUR 163,202 1.2 100.00% 136,002

Biotrin Intellectual Dublin EUR 144 0.6 97.50% 234Properties Limited (Ireland)

Biotrin Holdings Limited Dublin (Ireland) EUR 7,826,072 0.01 100.00% 782,607,110

DiaSorin South Africa (Pty) Ltd Johannesburg ZAR 101 1 100.00% 101(South Africa)

DiaSorin Australia (pyt) Ltd Sydney (Australia) AUD 100 1 100.00% 100

DiaSorin Ltd Shanghai (China) EUR 120,000 1 80.00% 96,000

Equity investments valued at cost

DiaSorin Deutschald Dietzenbach EUR 25,565 1 100.00% 1Unterstuetzungskasse GmbH (Germany)

Consorzio Sobedia Saluggia (Italy) EUR 5,000 20.00% 1

Annex IList of equity investments

42

I, the undersigned, Andrea Alberto Senaldi, Officer Responsible for the preparation of corporate financial reports of

DiaSorin S.p.A.

ATTEST

as required by the second subsection of Art. 154-bis, Part IV, Title III, Second Paragraph, Section V-bis, of Legislative Decree

No. 58 of February 24, 1998, that, to the best of my knowledge, the financial information included in the present docu-

ment corresponds to book of accounts and bookkeeping entries of the Company.

Saluggia, May 13, 2011. Andrea Alberto Senaldi

Officer Responsible for the preparation

of corporate financial reports

DIASORIN S.p.A.

Declaration in accordance with the second subsection of Art. 154-bis, Part IV, Title III, Second Paragraph, Section V-bis,of Legislative Decree No. 58 of February 24, 1998: “UniformLaw on Financial Intermediation Enacted Pursuant to Articles

8 and 21 of Law No. 52 of February 6, 1996”

Documents

Q1'11- Interim Report